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                                                                    EXHIBIT 10.2


                       EMPLOYEE BENEFIT MATTERS AGREEMENT

         THIS EMPLOYEE BENEFIT MATTERS AGREEMENT (this "Agreement") is made as 
of this 18th day of September, 1998 by and between FORWARD AIR CORPORATION,
a Tennessee corporation f/k/a Landair Services, Inc. ("FAF"), and LANDAIR
CORPORATION, a Tennessee corporation ("LAC").

                                    RECITALS

         WHEREAS, FAF is the holder of all of the issued and outstanding shares
of common stock, $.01 par value per share, of LAC (the "LAC Common Stock");

         WHEREAS, the employees of LAC and its Subsidiaries are covered by
various employee benefit plans sponsored by FAF which are limited to employees
of FAF and its Subsidiaries;

         WHEREAS, the Board of Directors of FAF has determined that it is
advisable and in the best interests of FAF, its shareholders and LAC to
distribute (the "Distribution") all of the outstanding shares of LAC Common
Stock on a pro rata basis to the holders of the common stock, $.01 par value per
share, of FAF (the "FAF Common Stock"), so that after such Distribution, LAC
will be an independent public company; and

         WHEREAS, FAF and LAC have agreed to enter into this Agreement to
provide for the allocation of certain assets and liabilities and certain other
matters relating to employees, employee benefit plans and compensation
arrangements;

         NOW THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth and other good and valuable consideration, the parties
hereto hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Distribution Agreement. As used in this Agreement, the
following terms shall have the following meanings, such meanings to be equally
applicable to both the singular and plural forms of the terms defined:

         CURRENT PLAN YEAR - The plan year or fiscal year, to the extent
applicable with respect to any Plan, during which the Distribution occurs.

         CUT-OFF DATE - The date immediately preceding the Distribution Date.

         DISTRIBUTION AGREEMENT - The Distribution Agreement entered into
between FAF and LAC dated the same date as this Agreement and governing the
terms and conditions of the Distribution.


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         ERISA - The Employee Retirement Income Security Act of 1974, as
amended, or any successor legislation thereto, and the rules and regulations
thereunder.

         FAF EMPLOYEE - Any person employed by FAF or a Subsidiary of FAF
immediately prior to the Distribution (including, without limitation, those who
are actively employed or on lay-off, leave, short-term or long-term disability
or other permitted absence from employment) who is not an LAC Employee.

         FAF OPTION - An option to purchase shares of FAF Common Stock granted
pursuant to the Amended and Restated Stock Option and Incentive Plan of FAF,
the Non-Employee Director Option Plan of FAF or the Non-Employee Director Award
of FAF.

         LAC EMPLOYEE - Any person employed by LAC or a Subsidiary of LAC
immediately prior to the Distribution (including, without limitation, those who
are actively employed or on lay-off, leave, short-term or long-term disability
or other permitted absence from employment), and any person who is employed by
FAF or any of its Subsidiaries (other than by LAC or a Subsidiary of LAC)
immediately prior to the Distribution and who is identified on the attached
SCHEDULE 1 hereto.

         LAC INDIVIDUALS - Any individual who (a) is an LAC Employee, or (b) is
a beneficiary of any individual specified in clause (a).

         LAC PARTICIPANT - LAC Employees and their respective beneficiaries.

         PLAN - Any plan, policy, arrangement, contract or agreement providing
compensation benefits for any group of Employees or former employees, or any
individual Employee or former employee, or the dependents or beneficiaries of
any such Employee or former employee, whether formal or informal or written or
unwritten, and including, without limitation, any means, whether or not
required, pursuant to which any benefit is provided by an employer to any
Employee or former employee or the beneficiaries of any such Employee or former
employee. The term "Plan" as used in this Agreement does not include any
contract, agreement or understanding entered into by FAF prior to the
Distribution Date or by FAF or LAC after the Distribution Date relating to
settlement of actual or potential employee related litigation claims.

         SERVICE CREDIT - The period taken into account under any Plan for
purposes of determining length of service to satisfy eligibility, vesting,
benefit accrual and similar requirements under such Plan.

         SUBSIDIARY - A corporation that is a member of a controlled group of
corporations, within the meaning of Internal Revenue Code Section 1563, with FAF
or with LAC, except that LAC and its Subsidiaries shall not be treated as
Subsidiaries of FAF.


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         TERMINEES - Any individual formerly employed by FAF or any Subsidiary
of FAF who terminated such employment prior to the Distribution Date, including
but not limited to any FAF employee who has retired prior to the Distribution
Date.

         WELFARE PLAN - An employee welfare benefit plan as defined in Section
3(1) of ERISA, including, without limitation, medical, vision, dental and other
health plans, retiree health plans, life insurance plans, retiree life insurance
plans, accidental death and dismemberment plans, long-term disability plans and
severance pay plans.

                                   ARTICLE II
                           SEPARATION OF BENEFIT PLANS

         2.1 EMPLOYMENT OF LAC EMPLOYEES. LAC shall employ or continue to
employ, effective as of the Distribution Date, all LAC Employees. Subject to the
terms and conditions of, except as otherwise provided in, this Agreement,
effective as of the Distribution Date, LAC shall provide LAC Employees with
terms and conditions of employment, including without limitation, employee
benefits and other perquisites, that are substantially similar to those provided
to LAC Employees immediately prior to the Distribution Date. However, nothing
contained in this Agreement shall impair LAC's ability to make such reasonable
changes in such terms and conditions of employment following the Distribution as
LAC may deem to be necessary or appropriate for the operation of LAC.

         2.2 SEPARATE RESPONSIBILITIES. FAF and LAC agree that FAF shall have
sole responsibility for its employee benefit plans, arrangements and policies
for employees of FAF and its Subsidiaries and that LAC shall have sole
responsibility for its employee benefit plans, arrangements and policies for LAC
Employees. FAF and LAC intend that, to the extent possible, LAC Employees shall
look solely to LAC and its Plans, arrangements and policies for the provision of
employee benefits, and that employees of FAF and its Subsidiaries shall look
solely to FAF and its Plans, arrangements and policies for the provision of
employee benefits.

                                   ARTICLE III
                            RETIREMENT SAVINGS PLANS

         3.1 FAF RETIREMENT SAVINGS PLAN.

         (a) Effective as of the Distribution Date, FAF shall continue
sponsorship of the FAF Retirement Savings and Investment Plan (the "FAF 401(k)
Plan") for all FAF Employees and Terminees.

         (b) On or before the Distribution, LAC shall take, or cause to be
taken, all action necessary and appropriate to establish and administer a new
plan named the Landair Corporation Retirement Savings and Investment Plan (the
"LAC 401(k) Plan") and to provide benefits thereunder after the date of the
establishment of such plan for all participants in or otherwise entitled to
benefits

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under the FAF 401(k) Plan. The LAC 401(k) Plan shall provide for the same
employer contribution formula for LAC Employees as the FAF 401(k) Plan provides
as of the Distribution Date. The LAC 401(k) Plan shall be intended to qualify
for tax-favored treatment under Sections 401(a) and 401(k) of the Code and to be
in compliance with the requirements of ERISA.

         (c) As soon as practicable after the date of the establishment of LAC
401(k) Plan, FAF shall cause the trustees of the FAF 401(k) Plan to transfer to
the trustee or other funding agent of the LAC 401(k) Plan the amounts (in cash,
securities, other property or a combination thereof) representing the account
balances of all LAC Individuals, said amounts to be established as account
balances or accrued benefits of such individuals under the LAC 401(k) Plan. Each
such transfer shall comply with Section 414(l) of the Code and the requirements
of ERISA and the regulations promulgated thereunder. LAC agrees to cause the
trustees or other funding agent of the LAC 401(k) Plan to accept the
plan-to-plan transfer from the FAF 401(k) Plan trustees, and to credit the
accounts of such LAC Individuals under the LAC 401(k) Plan with amounts
transferred on their behalf. Notwithstanding the foregoing, FAF and LAC agree
that if, subsequent to such transfer of account balances to the LAC 401(k) Plan,
a subsequent audit or other review establishes that additional funds should be
transferred to the LAC 401(k) Plan from the FAF 401(k) Plan, or that funds
should be returned from the LAC 401(k) Plan to the FAF 401(k) Plan, both parties
shall take all appropriate steps to effectuate the required transfer between the
trusts maintained for such plans.

         (d) FAF shall provide LAC, as soon as practicable after the date of the
establishment of the LAC 401(k) Plan (with the cooperation of LAC to the extent
that relevant information is in the possession of LAC or an LAC Subsidiary) with
a list of LAC Individuals who, to the best knowledge of FAF, were participants
in or otherwise entitled to benefits under the FAF 401(k) Plan on the Cut-off
Date, together with a listing of each participant's Service Credits under such
FAF 401(k) Plan and a listing of each account balance thereunder. FAF shall, as
soon as practicable after the Distribution Date and in accordance with SECTION
7.1 hereof, provide LAC with such additional information in the possession of
FAF or any of its Subsidiaries (and not already in the possession of LAC or any
of its Subsidiaries) as may be reasonably requested by LAC and necessary for LAC
or any of its Subsidiaries to establish and administer the LAC 401(k) Plan
effectively.

         (e) LAC and FAF shall, in connection with the plan-to-plan transfer
described in this SECTION 3.1, cooperate in making any and all appropriate
filings required by the Commission or the IRS, or required under the Code or
ERISA or any applicable securities laws and the regulations thereunder, and take
all such action as may be necessary and appropriate to cause such plan-to-plan
transfer to take place as soon as practicable after the date of the
establishment of the LAC 401(k) Plan or otherwise when required by law. Further,
LAC shall seek a favorable IRS determination letter that the LAC 401(k) Plan, as
organized, satisfies all qualification requirements under Section 401(a) of the
Code, and the transfers described in SECTION 3.1(C) shall take place as soon as
practicable after the receipt of such favorable IRS determination letter.
Notwithstanding the foregoing, such transfers may take place pending issuance of
such favorable determination letter, upon receipt of an opinion of counsel for
LAC reasonably satisfactory to FAF that the aforesaid Plan so qualifies, or that
it can be made to so qualify by retroactive amendment, and that any such

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retroactive amendment shall not decrease the accrued benefit of any participant
in such Plan. FAF agrees to provide to LAC's counsel such information in the
possession of FAF or any of its Subsidiaries as may reasonably be requested by
LAC's counsel in connection with the issuance of such opinion. FAF and LAC shall
each make any necessary amendments on a retroactive basis to the FAF 401(k)
Plan, or the LAC 401(k) Plan, respectively, as required by the IRS to issue the
favorable determination letter described above.


                                   ARTICLE IV
                          EMPLOYEE STOCK PURCHASE PLANS

         4.1 EMPLOYEE STOCK PURCHASE PLANS.

         (a) After the date of June 30, 1998, FAF shall suspend all regular
payroll deductions from the compensation of Participants (as defined in the LSI
Stock Purchase Plan) under the FAF Stock Purchase Plan until such time as the
Distribution is consummated. After consummation of the Distribution, FAF may, at
its option, resume such deductions under the FAF Stock Purchase Plan with
respect to FAF Employees.

         (b) Effective as of the Distribution Date, LAC shall take, or cause to
be taken, all action necessary and appropriate to establish and administer a new
stock purchase plan named the Landair Corporation Employee Stock Purchase Plan,
which plan shall be substantially similar to the FAF Stock Purchase Plan and
shall provide benefits thereunder after the Distribution Date for all eligible
LAC Employees.


                                    ARTICLE V
                               STOCK OPTION PLANS

         5.1 INCENTIVE AND NON-QUALIFIED OPTIONS. FAF and LAC shall cooperate
and take all action necessary to amend, if necessary, or otherwise provide for
adjustments of outstanding awards under the FAF Stock Option and Incentive Plan,
the FAF Non-Employee Director Option Plan and the FAF Non-Employee Director
Award, and to adopt the LAC Stock Option and Incentive Plan and the LAC
Non-Employee Director Option Plan, so that each LAC Individual and each
non-employee director of FAF who will be a non-employee director of LAC and not
of FAF after the Distribution shall exercise or forfeit all exercisable FAF
Options held by such LAC Individual or director prior to the Distribution.

             (a) Effective immediately after the Distribution Date, the
         number of shares of FAF Common Stock subject to, and the exercise price
         of, each FAF Option which immediately prior to the Record Date is
         outstanding and not exercised and is held by an FAF Individual shall be
         adjusted by FAF so that the number of shares of FAF Common Stock
         subject to such FAF Option shall be multiplied by the FAF Conversion
         Ratio and the

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         exercise price of such FAF Option shall be divided by the FAF
         Conversion Ratio. The "FAF Conversion Ratio" shall be equal to the
         amount obtained by dividing (i) the average of the daily closing sales
         prices for a share of FAF Common Stock on the NASDAQ-NMS for the five
         trading days prior to the record date for the Distribution by (ii) the
         average of the daily closing sales prices for a share of FAF Common
         Stock on the NASDAQ-NMS for the five trading days immediately following
         the Distribution Date.

             (b) As of the Distribution Date, each FAF Option which
         immediately prior to the Distribution Date is outstanding and not then
         exercisable and is held by an LAC Individual (a "Converted Option")
         shall, without any action on the part of the holder thereof, be
         converted (the "Option Conversion") into an option to purchase shares
         of LAC Common Stock. As a result of the Option Conversion, each
         Converted Option shall provide for the purchase of a number of shares
         of LAC Common Stock equal to the number of shares of FAF Common Stock
         subject to the Converted Option prior to the Option Conversion
         multiplied by the LAC Conversion Ratio. In addition, the per share
         exercise price of such Converted Option as a result of the Option
         Conversion shall be equal to the per share exercise price of the
         Converted Option prior to the Option Conversion divided by the LAC
         Conversion Ratio. The "LAC Conversion Ratio" shall be equal to the
         amount obtained by dividing (i) the average of the daily closing sales
         prices for a share of FAF Common Stock on the NASDAQ-NMS for the five
         trading days prior to the record date for the Distribution by (ii) the
         average of the daily closing sales prices for a share of LAC Common
         Stock on the NASDAQ-NMS for the five trading days immediately following
         the Distribution Date.

                                   ARTICLE VI
                     WELFARE BENEFIT PLANS AND OTHER MATTERS


         6.1 WELFARE PLANS. As of the Distribution, LAC will have established,
and will cover LAC Participants under, Welfare Plans and other employee welfare
benefit and fringe benefit arrangements (collectively, "LAC Welfare Plans") that
are substantially similar in all material respects to the Welfare Plans and
other employee welfare benefit and fringe benefit arrangements maintained by FAF
and its Subsidiaries (including members of the FAF Group) immediately prior to
the Distribution for the benefit of LAC Participants ("FAF Welfare Plans"). The
LAC Welfare Plans will be maintained in such form for a period of at least one
year following the Distribution.

         (a) The LAC Welfare Plans will provide for the immediate participation
of those LAC Participants who participated in the FAF Welfare Plans immediately
prior to the Distribution. The LAC Welfare Plans will credit each LAC
Participant for all LAC Welfare Plan purposes with all service and any other
item which had been credited to or otherwise accumulated for the benefit of such
LAC Participant under the FAF Welfare Benefit Plans immediately prior to the
Distribution. The transition from the FAF Welfare Plans to the LAC Welfare Plans
will not, in and of itself, adversely affect the LAC Participants. Without
limiting the generality of the foregoing, each LAC Welfare Plan, to the extent
applicable: (i) will recognize all amounts applied to deductibles,


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co-payments, out-of-pocket maximums and lifetime maximum benefits with respect
to LAC Participants under the corresponding FAF Welfare Plan for the plan year
that includes the Distribution and for prior periods (if applicable); (ii) will
recognize all service credited to waiting periods with respect to LAC
Participants under the corresponding FAF Welfare Plan; (iii) will not impose
any limitations on coverage of pre-existing conditions of LAC Participants
except to the extent such limitations applied to such LAC Participants under the
corresponding FAF Welfare Plan immediately before such LAC Welfare Plan became
effective; and (iv) will not impose any other conditions (such as proof of good
health, evidence of insurability or a requirement of a physical examination)
upon the participation by LAC Participants who were participating in the
corresponding FAF Welfare Plan immediately before such LAC Welfare Plan became
effective.

         (b) LAC and the LAC Subsidiaries will credit each LAC Employee with the
unused vacation days and personal and sickness days accrued in accordance with
the vacation and personnel policies and labor agreements of FAF and its
Subsidiaries (including members of the LAC Group) applicable to such employees
in effect immediately prior to the Distribution.

         (c) From and after the Distribution, except as specifically set forth
in this Agreement, LAC and the LAC Subsidiaries will be solely responsible for
and will fully perform, pay and discharge, all Liabilities in respect of LAC
Participants (and claims by or relating to LAC Participants) with respect to
employee welfare and fringe benefits (including, without limitation, medical,
dental, life, travel, accident, short-term and long-term disability,
hospitalization, workers' compensation and other insurance benefits) and retiree
health benefits and retiree life insurance benefit, whether under the FAF
Welfare Plans, the LAC Welfare Plans or otherwise.

         (d) LAC and FAF will cooperate in making all appropriate filings
required by law, implementing all appropriate communications with participants,
exchanging and sharing appropriate records and taking such other actions as may
be necessary or appropriate to implement the provisions of this SECTION 6.1.

         6.2 SEVERANCE PAY.

         (a) FAF and LAC acknowledge and agree that the transactions
contemplated by the Distribution Agreement, this Agreement, any other Agreement
or any agreement relating to the transactions contemplated by the Distribution
will not constitute a severance of employment of any LAC Employee prior to or as
a result of the transactions contemplated thereby, and that individuals who, in
connection with the Distribution, cease to be FAF Employees and, pursuant to
this 

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Agreement, become LAC Employees will not be deemed to have experienced a
termination, layoff or severance of employment from FAF and its Subsidiaries, in
each case for purposes of any policy, plan, program or agreement of FAF or any
of its Subsidiaries (including members of the LAC Group) that provides for the
payment of severance, salary continuation or similar benefits.

         (b) LAC and the LAC Subsidiaries will be solely responsible for, and 
will fully perform, pay and discharge, all Liabilities in connection with claims
by or on behalf of LAC Participants in respect of severance pay, salary
continuation and similar obligations relating to the termination or alleged
termination (whether voluntary or involuntary) of any such person's employment
after the Distribution (whether or not such claim is based on any severance
policy, agreement, arrangement or program which may exist or arise under any
contract, employment agreement or collective bargaining agreement or under any
federal, state, local, provincial or foreign law).


                                   ARTICLE VII
                                  MISCELLANEOUS

         7.1 ACCESS TO INFORMATION, COOPERATION. FAF and LAC and their
authorized agents will be given reasonable access to and may take copies of all
information relating to the subjects of this Agreement (to the extent permitted
by federal and state confidentiality laws) in the custody of the other party,
including any agent, contractor, subcontractor, agent or any other person or
entity under the contract of such party. The parties will provide one another
with such information necessary to administer each party's Plans. The parties
will cooperate with each other to minimize the disruption caused by any such
access and providing of information.

         7.2 RIGHTS OF EMPLOYEES. This Agreement is not intended to give any
individual employee or former employee of FAF or LAC or any of their
Subsidiaries any personal right or interest. No employee, shall have any right
under this Agreement to maintain employment with FAF, LAC or any Subsidiary,
become employed by FAF, LAC or any Subsidiary or accrue any benefit with respect
to employment. No employee, former employee, beneficiary or dependent shall have
any right to be designated as an LAC Employee or to be retained as the
responsibility of FAF.

         7.3 ENTIRE AGREEMENT. This Agreement, together with the Distribution
Agreement, embodies the entire Agreement and understanding of the parties with
respect to the matters provided for herein and shall supersede any and all prior
agreements, arrangements and understanding relating to such matters. No
amendment, waiver of compliance with any provision or condition hereof or
consent pursuant to this Agreement shall be effective unless evidenced by an
instrument in writing signed by the parties.


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         7.4 GOVERNING LAW. The interpretation and performance of this Agreement
shall be governed by the laws of the State of Tennessee without regard for the
choice of law provisions thereof.

         7.5 NOTICES. All notices or other communications required or permitted
under this Agreement shall be delivered by hand, mailed by certified or
registered mail, postage prepaid and return receipt requested, or sent by cable,
telegram, telex or telecopy (confirmed by regular, first-class mail), to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:


In the case of FAF, to                       In the case of LAC, to

         Forward Air Corporation                  Landair Corporation
         430 Airport Road                         430 Airport Road
         Greeneville, Tennessee 37745             Greeneville, Tennessee 37745
         Attention: General Counsel               Attention: General Counsel


         7.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.

         7.7 TERMINATION. This Agreement shall be terminated if the Distribution
Agreement is terminated or if the Distribution fails to occur. If the Agreement
terminates under this Section 7.7, no party shall have any liability to any
person under this Agreement.


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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year first
above written.


                                           FORWARD AIR CORPORATION 
                                           f/k/a Landair Services, Inc.


                                           By: /s/ Bruce A. Campbell
                                              ---------------------------------
                                           Title: President
                                                 ------------------------------


                                           LANDAIR CORPORATION


                                           By: /s/ E. R. Brown
                                              ---------------------------------
                                           Title: President
                                                 ------------------------------


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